Petaquilla’s rebuttal

PANAMA. In an article printed in the Panama Star , on August 10 a story appeared with the heading: Mining Abuse, “Petaquilla Gold blasted and fined,”The story said that “the Ombudsman had fined Petaquilla Minerals Group $1 million has ordered Petaquilla Gold, S. A. to additionally pay almost $935,000 (nine hundred thirty five thousand dollars) in compensation for the environmental destruction caused by its unauthorized mining activities

It also ordered that all company operations cease until mitigation efforts are put in place.”

A communication received from Petaquilla Gold says the Company would like to clarify that the law under which the Office of the Public Defender of the Republic of Panama was enacted, does not provide the Ombudsman with the authority to fine nor order the closing of private corporations and much less to ignore the laws of the Republic, such as Contract-Law No. 9 of February 26, 1997.

“We are sure that the Ombudsman would not dare to make such a juridical mistake, and hence invite the journalist author of the news in English, Marti Collings, to read Law 7 of February 5th, 1997, modified by Law 41 of 2005, creating the Office of the Public Defender.

“Likewise, we respectfully request that Estrella de Panama by virtue of the pertaining right to rebuttal, publish the following press release:

Press Release

Because of the respect due to the population and following the public statements contained in Resolution DP 386p-05 issued by the Office of the Public Defender, Petaquilla Gold, S.A., feels obliged to present to the public the following considerations:

1.The complaint presented by Mr. Pastor Duran, that motivated the resolution of the Office of the Public Defender, is based on suppositions and speculations, lacking true support and scientific foundations.

2.The Ombudsman has never attended to the counterpart, has not accepted to meet with the representative groups of the mining activity in Panama nor with Petaquilla Gold, S.A.company.

3.Mining activity is a lawful activity in our country and is regulated by the legal system of the Republic of Panama.

4.Petaquilla Gold, S.A. has based its operations on Contract Law N° 9 of February 26, 1997, subscribed with the Estate, which is in force and which the company has fully complied with.

5.Petaquilla Gold, S.A. has an Environmental Impact Study approved by ANAM and maintains a continuous environmental management system.

Furthermore, it is in the process of obtaining certification ISO 14001 concerning environmental management and OHSAS 18001 on Occupational Safety and Health.

6.Petaquilla Gold, S.A. continuously carries out environmental mitigation and compensation activities and maintains a very aggressive reforestation project.

7.Petaquilla Gold, S.A. has a payroll of more than 800 direct workers, protected by all the benefits stipulated by the labor and social legislation of our country.

8.The Company keeps a high level security management in relation to labor risks, occupational health and environmental management

9.The Company performs a series of social programs and projects that positively impact the quality of living of the population of more than fifty communities in the provinces of Colon, Cocle and Veraguas.

10. The Ombudsman has evidently been incorrectly informed on the subject; furthermore, he should listen to all the parties before issuing any opinion, in this particular case, on mining activities.

11.Petaquilla Gold, S.A. reasserts, as it has always done, its disposition to welcome all the competent authorities, including those of the Office of the Public Defender, in order to verify “in situ”, the functioning of the project, the monitoring of the waters, the soil, labor relations, relations with the community, relations with the authorities, expecting the office of the Public Defender to offer the Company the same opportunities and the same treatment received by those that consider that they should oppose the project.

Issued in the City of Panama on the 11th day of the month of August, 2009.

Engineer Carlos Salazar Spokesman, Petaquilla Gold, S.A.